East African curencies do well in 2012..

According to the report by Bank of Uganda, East African currencies tend to do well in the previous fiscal year in relation with the USD.

Kampala. Regional currencies performed relatively well against major trading partners in 2012 than they did in 2011, data shows. The Uganda shilling was stronger in 2012 compared to 2011 where it experienced more swings. The gain in the Ugandan shilling value signifies that the country’s foreign exchange market was not very volatile as it was in 2011, which among other things, affected the overall economic performance. The executive director of research at the Bank of Uganda, Dr Adam Mugume, told Daily Monitor that the Ugandan shilling had depreciated by 10.7 per cent on annual basis compared to 2011 which it depreciated against the US dollar by 24.98 per cent. Dr Mugume said the local currency traded from an average of Ush2,446.9 per dollar in 2012 compared to Ush2,673.6 per dollar in 2011. It started depreciating in the second quarter of 2012 (in October, November and December) following a pull out of offshore investors and the sudden aid cuts to Uganda. It hit a low of 2,710/2,720 in mid-November as a widening current account deficit, aid cuts and falling yields on government debt piled pressure on the unit. Peer currency of East African states also marked considerable gains against the dollar during 2012. Dr Mugume explained that the Kenya shilling has largely gained its level as of December 2011, the currency was 86.9 per dollar and the average for December 2012 was 86.01 per US dollar. On the other hand, he said the Tanzania shilling has appreciated in the same period, from Tsh1,641.8 per dollar in 2011 to Sh1,596.7 per dollar in 2012. For the Rwandense Franc, Dr Mugume said it had a volatile performance due to donor suspension. “Rwanda’s Franc has so far depreciated by 4.6 per cent between December 2011 and December 2012; from 603.4 per dollar to 630.9 per dollar, reflecting the impact of aid suspension,” he said. In Africa, the South African rand is the most traded currency. However, due to weak economic growth in South Africa which is projected to grow at 3.5 per cent below the African economic growth of 5 per cent for 2012, hence its weak currency performance.